Coronavirus: Picking a letter for the recovery – Charles Schwab
|It’s human nature to look ahead to brighter days and it’s the ‘job’ of markets to do the same. Regardless of the murkiness ahead, economists are starting to assess the ‘shape’ of the recovery, per Charles Schwab.
Key quotes
“In a perfect world, once the economy starts to open back up, a ‘V’ recovery would take hold. That may be wishful thinking other than for certain high-demand areas of the economy.”
“For now, we are experiencing an ‘I’ (straight down).”
“Looking ahead, we may see a number of different letters; including ‘L’ (think cruising perhaps), ‘W’ (especially if we suffer COVID-19 setbacks/re-eruptions) or ‘M’ (the dreaded upside-down ‘W’). But one letter may be the best one to illustrate the broad economy: ‘Y’.”
“A ‘Y’ may be apt because there were already fault lines seen in the economy before the COVID-19-related economic implosion. Once the economy begins to open back up, we could experience a short-term surge in growth; but that’s unlikely to be sustained (hence the ‘Y’ shape).”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.